Signing a three year contract usually meant a cheaper device.

Canadians still stuck on an old three-year wireless contract may be able to leave their current carrier penalty-free as soon as June 3rd as the Canadian Radio-television and Telecommunications Commission’s (CRTC) deadline on lengthy wireless contracts takes full effect this Sunday.

In June 2013, the CRTC banned three-year cell phone contracts in its wireless code to give customers a chance to switch providers more often without an expensive early termination fee to deter them. The commission set a two-year transition period which will end June 3.

But it turns out wireless carriers have not made the process of leaving penalty-free easy and the Commissioner for Complaints for Telecommunications Services (CCTS) expects the ombuds office will be forced to intervene on behalf of consumers. Some providers have applied creative interpretations of the wireless code the industry earlier sued to block on the grounds it created retroactive interference with contractual rights. The Federal Court of Appeal dismissed the wireless industry’s lawsuit last week. The CCTS is notifying providers what it expects from them.

There are two primary groups of customers affected by the June 3rd deadline:

• Those who signed a three-year contract before June 3, 2013:

These customers will see their three-year contracts cut to two years, and all will expire June 3. They can leave their current provider without any early termination fees or penalties.

• Those who signed a three-year contract between June 3-Dec. 3, 2013:

Things get more complicated for customers in this window. While carriers quickly introduced new two-year plans, there are a number of customers who managed to sign a three-year contract during this transition period. These longer contracts have also been cut to 24 months by the CRTC, but an early termination fee may still apply if the contract has not run a full two years and carriers will be permitted to get back their device subsidy if you have not yet paid off your device.

If you like your current carrier, you can stay on your existing contract and nothing will change. If you are ready to leave for another provider, you will need to calculate the termination fee you are likely to owe when you cancel service.

If you accepted a device subsidy to reduce the cost of your device, here is the formula to determine your payoff amount:

Jane Smith signed a contract with Rogers in the late fall of 2013. She is now about 20 months into her contract, which the CRTC has now automatically shortened from its original three years to two. For our purposes, let us say she received a device subsidy of $240 (the exact amount of the device subsidy you received is available from your provider.)

Carriers like Vidéotron offer customers discounts if they bring their old device along.

To calculate the payoff amount to buy out and cancel the contract, take the original device subsidy and divide it by 24. In our example, that equals $10. That means for each month Jane has been in her contract, she has repaid $10 towards the $240 subsidy she received. In this example, she has made 20 payments under contract, which means she has paid back $200 and still owes an additional $40. When she cancels service to switch to Bell (or whatever other carrier she chooses), her exit fee will be $40.

The CRTC also allows carriers to collect an Early Termination Fee (ETF) from customers who paid for a device upfront or brought their own when they signed a contract. These no-subsidy customers must either wait until 24 months have passed from the contract signing date or pay an ETF of the lesser of $50 or 10% of the minimum monthly charge for the remaining months of the now two-year contract.

Bill Smith brought his old iPhone to Telus and signed a three-year contract at the same time Jane did. The CRTC has already lopped off one year of his contract. He will hit the 24 month mark four months from now, but wants to leave to switch to Vidéotron Mobile today. The minimum monthly charge on his Telus bill is $65. For the remaining four months on his contract, he has to pay 10% of $65 for his termination penalty, which amounts to $26 total — his ETF.

Howard Maker, chief executive officer of the CCTS, said, “The calculation is maybe a bit challenging, because not all customers’ contracts will indicate what the device subsidy is.”

Some customers have used the impending end of their contracts as a tool to negotiate a better deal, but it can be tough finding one. After the demise of the three-year contract, last fall many Canadian cell providers raised the monthly price of service on two-year contracts to recoup lost profits.

More than three years after Canadian regulators required Bell Canada’s northern subsidiary, Northwestel, to undertake a $233 million modernization and upgrade plan, the CRTC has ruled the company is overcharging consumers for Internet access and has ordered rate cuts.

Customers in Nunavut, the Northwest Territories and Yukon pay some of the highest prices in the world for DSL Internet access, more than three times higher than what comparable broadband costs in southern Canada. The CRTC has found those prices unjustifiable, especially after its 2011 finding that Northwestel enjoyed strong financial performance while chronically underinvesting in its network.

The CRTC decision requires the company to cut prices for its DSL Internet 5 (5Mbps/512kbps) and DSL Internet 16 (16Mbps/768kbps) in N.W.T. and Yukon by 30% this May. Northwestel’s budget plans DSL Internet Lite (768/128kbps) and DSL Internet 2 (2.5Mbps/384kbps) will be reduced in price by 10 percent.

Customers of Northwestel’s most popular DSL plans pay between $65-90 a month for 2.5 or 5Mbps service with usage caps of 40 and 125GB per month, respectively.

Customers will also no longer face a $20/month broadband-only surcharge if they don’t want landline service and Northwestel’s overlimit fee, now $2-3/GB in the Northwest Territories, will be cut by at least $0.50/GB.

“Although we recognize the exceptional situation that exists in Northwestel’s territory, we must not let these challenges hinder the development and affordability of telecommunications services in the North,” said Jean-Pierre Blais, the CRTC’s chairman, in a March 4 release. “Access to reasonably priced Internet services plays an essential role in the North’s economic and social development. With this decision, we are reducing the gap between what consumers pay for Internet services in the northern and southern parts of Canada.”

Because of the company’s past pricing practices, Northwestel will not be permitted to increase residential Internet rates until the end of 2017 at the earliest, and will need CRTC approval for any other rate increases.

Northwestel’s operating service area includes the Yukon, Northwest Territories, northern British Columbia and Nunavut.

Residents in the northwestern and north-central regions of Canada have complained for years about poor service and high prices charged by Northwestel for Internet access.

[flv]http://www.phillipdampier.com/video/CBC North Northwestel gets slammed in Whitehorse 6-20-13.flv[/flv]

Back in the summer of 2013, Northwestel was the subject of a CRTC public hearing that got heated after customers and competitors complained the company had a de facto monopoly. (2:53)

At a 2013 hearing, Blais heard from a number of angry residents upset about Northwestel’s performance.

“I know you are frustrated; we heard it from the interveners, but we’ve pushed things considerably,” Blais said at the time.

“The DSL package that I pay for out at Lake Lebarge is absolutely ridiculous in comparison to high-speed in town,” said Jeremy Jones. “[Northwestel charges] $90 for [5Mbps DSL with a usage cap of] 125GB. The only way to increase it would be to put in another phone line and second modem and that would have ended up being another $100+ per month. We’ve decided it is cheaper just to go over it if we need to.”

Customers are also frustrated by the fact the company receives over $20 million annually in federal subsidies, but those benefiting the most from Northwestel’s finances are its shareholders.

Native communities in isolated areas of northern Canada have learned it is better to build their own networks than wait for promises from Northwestel to be fulfilled.

The K’atl’Odeeche First Nation built its own fiber network on its reserve in Hay River, N.W.T. after Northwestel reneged on an agreement to improve existing DSL service. Today, the native community gets better Internet access than the rest of Hay River, and the community is willing to share their enhanced Internet connectivity with Northwestel for the benefit of others nearby if the company would agree to connect to it.

“We saved them millions of dollars in infrastructure upgrades and I think it’s only fair that they lease a small portion of that infrastructure for them to meet their CRTC mandate,” said Lyle Fabian, the IT manager for the First Nation.

Fabian believes other First Nations should strive for broadband self-sufficiency by also building their own networks to take control of their digital future. In almost every case, Fabian said, those networks will deliver better service than what is on offer from Northwestel.

While the CRTC-ordered rate cuts will help customers in the Yukon and Northwest Territories almost immediately, Internet access in satellite-based Nunavut will continue to be exorbitantly expensive until the CRTC completes a review of those rates. Nunavut residents pay $179.95 a month for 5Mbps/512kbps service with a 30GB usage cap.

[flv]http://www.phillipdampier.com/video/First Mile – First Mile Community Stories Tour Katlodeeche First Nation Community Network 5-23-12.mp4 [/flv]

Henry Tambour from K’atl’odeeche First Nation in the Northwest Territories of Canada gives a 2012 tour of the first phase of the locally owned and operated fiber network. The community of 300 elected to take control of their broadband future back from Northwestel. (4:12)

The first legal “bricks of paper” arriving from Bell’s attorneys in the case of Bell v. Ordinary Canadian consumers arrived at the home of Jean-François Mezei of Pointe-Claire, Que.

A Manitoba university student and consumer groups who won their case against Bell’s preferential treatment of its mobile streaming video service are now being threatened with demands they personally cover Bell’s legal expenses as the phone company appeals the ruling in court.

The dispute involves Bell Mobile TV Service — a $5/mo optional add-on that allows Bell’s mobile customers to stream up to 10 hours of video programming, some of it from Bell-owned television networks like CTV, without it counting against the customer’s usage cap. Each additional hour costs $3. The service prices usage based on time, not data usage, which lets Bell stream very high quality video to customers. Competitors like Netflix do not have this option and their customers are billed based on the amount of data consumed, which is around 800 percent higher than what Bell Mobile TV charges.

University of Manitoba graduate student Benjamin Klass filed a complaint with the Canadian Radio-Television and Telecommunications Commission (CRTC) in 2013 accusing Bell of violating Net Neutrality and creating an anti-competitive marketplace for online video. ​Twelve of the 43 channels available on Mobile TV — including CTV, TSN and The Movie Network — are owned by Bell Media, a subsidiary, like Bell Mobility, of the media behemoth BCE.

Klass alleged the practice was a clear violation of Canada’s laws governing broadcasting: “No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage.”

The CRTC agreed with Klass and in late January ruled in favor of Klass’ complaint, giving Bell and Quebec-based Vidéotron (which offers a similar service) until the end of April to close them down in their present form.

BCE, the parent of Bell Mobility, told the CBC it was “shocked” by the CRTC’s ruling, suspecting the complaining groups mislead regulators into thinking Bell favored its own content over others.

“There’s a hint here that the government believes Bell Mobile TV delivers only Bell Media content,” spokesman Jason Laszlo said. “They should know we offer mobile TV content from all of Canada’s leading broadcasters in English and French.”

Laszlo added Bell-owned content only comprises 20% of Bell Mobile TV programming and that the ruling would deprive more than 1.5 million current Bell Mobile TV subscribers from getting the service after the spring deadline to shut it down.

The CRTC and consumer groups argue that is beside the point.

“At its core, this decision isn’t so much about Bell or Vidéotron,” CRTC chair Jean-Pierre Blais said at a breakfast luncheon in London, Ont., in late January. “It’s about all of us and our ability to access content equally and fairly, in an open market that favours innovation and choice. The CRTC always wants to ensure ­— and this decision supports this goal ­— that Canadians have fair and reasonable access to content. It may be tempting for large vertically integrated companies to offer certain perks to their customers. But when the impetus to innovate steps on the toes of the principle of fair and open access to content, we will intervene.”

Consumer group OpenMedia says Bell’s motivation isn’t to create a level playing field or provide customers with more options for online video. It’s about artificially inflating the cost of accessing services like Netflix and other independent video companies that are innovating away from the traditional pay television package.

“Bell is doing everything in its power to make the Internet more like cable TV,” said OpenMedia campaigns manager Josh Tabish. “They want the power to pick and choose what we see by forcing competing services into a more expensive toll lane online.”

Klass (Image: CBC)

Bell’s legal strategy going forward is an homage to the one American wireless companies used for years to avoid Net Neutrality.

Bell Mobility argues that Bell Mobile TV is a broadcasting service, not a telecommunications service and therefore doesn’t fall under the jurisdiction of the Telecommunications Act.

Since the CRTC was not receptive to that argument, Bell is taking the matter to the Federal Court of Appeal, asking it to overturn the CRTC ruling and grant the company court and legal costs paid for by the Canadian consumers that brought the original complaint.

Jean-François Mezei of Pointe-Claire, Que. is among them and has been the unhappy recipient of several parcels containing “bricks of paper” from FedEx he suspects is just the beginning.

Mezei has been tweeting about ongoing developments in the case, and asked Bell, “how come you have no press release bragging about how Bell Mobility is suing individual citizens who participated in [the CRTC complaint]?”

Klass told CBC News he hasn’t yet made up his mind how to respond to the court filing, but admitted it is unnerving.

“In that regard, it really strikes me as a method of intimidation,” he said. “Right off the bat, it has a chilling effect. It appears that Bell is simply pursuing the argument, that it unsuccessfully made to the CRTC, through the court.”

The arrival of Netflix north of the American border has sparked a potential video revolution in Canada that some fear could renew “an erosion” of Canadian culture and self-identity as the streaming video service floods the country with American-made television and movies. But anxiety also prevails on the upper floors of some of Canada’s biggest telecom companies, worried their business models are about to be challenged like never before.

Two weeks ago, the country saw a remarkable Canadian Radio-television and Telecommunications Commission (CRTC) hearing featuring a Netflix executive obviously not used to being grilled by the often-curt regulators. When it was all over, Netflix refused to comply with a CRTC order for information about Netflix’s Canadian customers.

Earlier today, the CRTC’s secretary general, John Traversy, declared that because of the lack of cooperation from Netflix, all of their testimony “will be removed from the public record of this proceeding on October 2, 2014.” That includes their oral arguments.

“As a result, the hearing panel will reach its conclusions based on the remaining evidence on the record. There are a variety of perspectives on the impact of Internet broadcasting in Canada, and the panel will rely on those that are on the public record to make its findings,” Mr. Traversy wrote in a nod to Canada’s own telecom companies.

Not since late 1990’s Heritage Minister Sheila Copps, who defended Canadian content with her support of a law that restricted foreign magazines from infiltrating across the border, had a government official seemed willing to take matters beyond the government’s own policy.

CRTC chairman Jean-Pierre Blais threw down the gauntlet when Netflix hesitated about releasing its Canadian subscriber and Canadian content statistics to the regulator. Mr. Blais wanted to know exactly how many Canadians are Netflix subscribers and how much of what they are watching on the service originates in Canada.

With hearings underway in Ottawa, bigger questions are being raised about the CRTC’s authority in the digital age. Doug Dirks from CBC Radio’s The Homestretch talks with Michael Geist at the University of Ottawa. Sept. 19, 2014 (8:40) You must remain on this page to hear the clip, or you can download the clip and listen later.

Netflix has operated below regulatory radar since it first launched service in Canada four years ago. The CRTC left the American company with an impression it had the right to regulate Netflix, but chose not to at this time. The CRTC of 2010 was knee-deep in media consolidation issues and did not want to spend a lot of time on an American service that most Canadians watched by using proxy servers and virtual private networks to bypass geographic content restrictions. But now that an estimated 30% of English-speaking Canada subscribes to Netflix, it is threatening to turn the country’s cozy and well-consolidated media industry on its head.

Ask most of the corporate players involved and they will declare this is a fight about Canada’s identity. After all, broadcasters have been compelled for years to live under content laws that require a certain percentage of television and radio content to originate inside Canada. Without such regulations, enforced by the CRTC among others, Canada would be overwhelmed by all-things-Americans. Some believe that without protection, Canadian viewers will only watch and listen to American television and music at the cost of Canadian productions and artists.

[flv]http://www.phillipdampier.com/video/BNN Netflix vs the CRTC 9-22-14.flv[/flv]

Kevin O’Leary, Chairman, O’Leary Financial Group is furious with regulators for butting into Netflix’s online video business and threatening its presence in Canada is an effort to protect incumbent business models. From BNN-Canada. (8:45)

A viewer watches Netflix’s Corie Wright testify before the CRTC. (Image: Sean Kilpatrick, The Canadian Press)

But behind the culture war is a question of money – billions of dollars in fact. Giant media companies like Rogers, Shaw, and Bell feel threatened by the presence of Netflix, which can take away viewers and change a media landscape that has not faced the kind of wholesale deregulation that has taken place in the United States since the Reagan Administration.

Before Netflix, the big Canadian networks didn’t object too strongly to the content regulations. After all, CRTC rules helped establish the Canadian Media Fund which partly pays for domestic TV and movie productions. Canada’s telephone and satellite companies also have to contribute, and they collectively added $266 million to the pot in 2013, mostly collected from their customers in the form of higher bills. Netflix doesn’t receive money from the fund and has indicated it doesn’t need or want the government’s help to create Canadian content.

“It is not in the interest of consumers to have new media subsidize old media or to have new entrants subsidize incumbents,” added Netflix’s Corie Wright. “Netflix believes that regulatory intervention online is unnecessary and could have consequences that are inconsistent with the interests of consumers,” Wright said, adding viewers should have the ability “to vote with their dollars and eyeballs to shape the media marketplace.”

That is not exactly what the CRTC wanted to hear, and Wright was off the Christmas card list for good when she directly rebuffed Mr. Blais’ requests for Netflix’s data on its Canadian customers. Wright implied the data would somehow make its way out of the CRTC’s offices and end up in the hands of the Canadian-owned broadcast and cable competitors that know many at the CRTC on a first name basis.

Does Netflix pose a threat to Canadian culture? Matt Galloway spoke with John Doyle, the Globe & Mail’s television critic, on the Sept. 22nd edition of CBC Radio’s Metro Morning show. Sept. 22, 2014 (8:31) You must remain on this page to hear the clip, or you can download the clip and listen later.

Mr. Blais, obviously not used to requests being questioned, repeated demands for Netflix’s subscriber data to be turned over by the following Monday and if Netflix did not comply, he would revoke Netflix’s current exemption from Canadian content rules and bring down the hammer of regulation on the streaming service.

Blais

The deadline came and went and last week Netflix defiantly refused to comply with the CRTC’s order. A Netflix official said that while the company has responded to a number of CRTC requests, it was not “in a position to produce the confidential and competitively sensitive information, but added it was always prepared to work constructively with the commission.”

Now things are very much up in the air. Many Canadians question why the CRTC believes it has the right to regulate Internet content when it operates largely as a broadcast regulator. Public opinion seems to be swayed against the CRTC and towards Netflix. Canadian producers and writers are concerned their jobs are at risk, Canadian media conglomerates fear their comfortable and predictable future is threatened if consumers decide to spend more time with Netflix and less time with them. All of this debate occurring within the context of a discussion about forcing pay television companies to offer slimmed down basic cable packages and implement a-la-carte — pay only for the channels you want — is enough to give media executives heartburn.

To underscore the point much of this debate involves money, American TV network executives also turned up at the CRTC arguing for regulations that would compensate American TV stations for providing “free” programming on Canadian airwaves, cable, and satellite — retransmission consent across the border.

Netflix does not seem too worried it is in trouble in either Ottawa or in the halls of CRTC headquarters at Les Terrasses de la Chaudière in Gatineau, Québec, just across the Ottawa River. Prime Minister Stephen Harper and Heritage Minister Shelly Glover have made it clear they have zero interest in taxing or regulating Netflix. Even if they were, the Canada-U.S. free trade agreement may make regulating Netflix a practical impossibility, especially if the U.S. decides to retaliate.

[flv]http://www.phillipdampier.com/video/Canadian Press CRTC vs Netflix 9-19-14.mp4[/flv]

Dwayne Winseck, Carleton School of Journalism and Communication, defended the role the CRTC is mandated to play by Canada’s telecommunications laws. (1:41)

Canadians pay between $495-734 million a year in extra charges just to receive a mailed copy of their monthly bill for cell phone, cable and broadband service. Now the Public Interest Advocacy Centre wants the government to ban charges for mailed invoices.

Jonathan Bishop, PIAC’s Research Analyst, said, “a majority of consumers have indicated their disapproval of being charged extra for a paper bill. Most Canadians believe supplying a paper bill in the mail without having to pay an extra fee is part of the company’s cost of doing business.”

If you ask most cable, phone and satellite companies about their paper billing policies, they will claim the fees are designed to encourage people to adopt more ecofriendly online billing. But the poor and elderly, who often lack Internet access, are forced to pay extra monthly fees just to find out how much they owe their providers.

Some providers have also been quietly increasing those paper bill fees, which now reach as high as $5.95 a month.

Trying to avoid a more formal regulatory proceeding, the Canadian Radio-television and Telecommunications Commission asked 11 major telecommunications companies to attend an informal meeting last week to negotiate curtailing the fees. The meeting fell apart with providers only willing to exempt certain customers from the billing fees, which have become a lucrative new source of revenue for many.

As of last November, 36 companies said they do not charge for paper bills, while 27 others charged between 99 cents – $5.95 a month. Among those with customer-friendly free paper bills: Shaw Communications, Manitoba Telecom, SaskTel and Bell Aliant. Those charging $2 a month for a paper bill include Rogers Communications, Telus, and Bell/BCE.  Rogers and Bell charge the fee for home phone, wireless, Internet and television services while Telus only charges for wireless and Internet bills.

Quebecor Inc.-owned Vidéotron Ltée wants $3 a month for wireless customers seeking a detailed paper bill listing all calls, texts and data used, but a less comprehensive standard bill can be obtained free of charge.

Wind Mobile, one of Canada’s new wireless competitors, charges $4 a month for a paper bill and one of their affiliated companies OneConnect, serving businesses with VoIP service, charges $5.95 a month.

The 11 largely intransigent companies: Bell Aliant, Bell Canada, Cogeco Cable, Eastlink, Globalive, MTS Allstream, Québecor, Rogers, SaskTel, Shaw, Telus only came to unanimous agreement that customers with “no personal or home broadband connection, persons with disabilities who need a paper bill, seniors aged 65 and over and veterans of the Canadian Armed Forces” will be able to avoid a paper bill fee, if charged. The exemptions take effect Jan. 1, 2015.

“While the companies agreed to adopt consistent exemptions to such fees, they were unable to reach a consensus to eliminate them entirely,” said CRTC chairman Jean-Pierre Blais. “Many Canadians who will not benefit from the exemptions will be disappointed with the outcome so far.”

The CRTC is going to further survey Canadians before deciding what actions to take next.

[flv]http://www.phillipdampier.com/video/CTV Telecoms Will Exempt Some from Paper Bill Fees 9-1-14.flv[/flv]

CTV reports consumers are frustrated about rising paper bill fees. The CRTC’s efforts to end the fees ran into profit motives — Canadian companies earn up to $700 million annually from bill printing. (1:48)